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2018 (2) TMI 844 - AT - Service TaxClassification of taxable service - works contract service - effective date of tax liability - Held that: - the services rendered by the appellant, are of composite in nature involving transfer of goods as well as provision of service. As such, the tax liability on such contracts will arise only w.e.f. 1.6.2007 - the works contract service shall be liable to tax only w.e.f. 1.6.2007. Whether or not the appellant discharged service tax correctly by availing the composition scheme as per 2007 Rules? - Held that: - the appellants discharged service tax at the composition rates w.e.f. 1.6.2007 and claimed to have filed regular returns indicating the availment of such scheme by them - there is no tax liability on such work contract prior to 1.6.2007 - the tax liability fixed on an ongoing contract can arise only w.e.f. 1.6.2007 and the appellant can avail the composition scheme when such tax liability arises. Penalties imposed on the demands raised for the period 1.10.2009 to 30.09.2010 - interest - Held that: - Considering the question of interpretation and judicial pronouncements, which came much after the impugned order, we are inclined to set aside the penalties imposed on the appellant - Interest wherever applicable on delayed payment of service tax is statutorily requirement and has to be complied by the appellant. Appeal allowed in part.
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